‘Chaos is an excellent catalyst’: Why Ian Whitworth believes now is a great time to grow a business
Everyone is down. Your competitors are feeling timid, wanting to hide, and are firmly in burrow mode. Clients who would normally never change their supplier are thinking that in these different times, maybe they should look around.
This is Ian Whitworth’s justification for why now is the perfect time to start a business, or be more aggressive in expanding your own. Highlighted in his upcoming book, Undisruptable, Whitworth believes everyone is caught out, and it’s your chance to strike.
“Competitors who would normally crush you are dazed and confused after COVID-19 reshuffled their deck. Their precious systems and processes are interrupted. They hate change. They’re slow to move, so they’re vulnerable,” Whitworth writes in Undisruptable.
Whitworth originally set out to write his book because all of the business advice he received early on in his career turned out to be wrong, he tells me.
Get early investors, listen to MBAs, and aim for an IPO as the ultimate goal didn’t make any sense for the company he founded, Scene Change, a high-end audiovisual hire company for events and conferences.
After launching the company in the year leading up to the GFC, Whitworth found it almost impossible to land clients, or even have serious conversations with them.
“Suddenly, everything went down, and clients went, ‘hey, what about that cheaper alternative, with those friendly people that called us a year ago’,” recalls Whitworth.
Scene Change now has annual revenue of around $20 million, having grown from a base of zero over 12 years. The high capital expenditure business has been able to finance its growth through retained earnings.
Undisruptable tips for SMEs
The past year has revealed something new for Whitworth: there is (generally) too much management in business.
In his words, “management multiplies like the broomsticks in Fantasia. You look, there’s one there, now four, now 16”.
After seeing the effects of COVID, it’s apparent that people can get by with less management supervision. His advice is to put your energy into the frontline staff doing the work for clients.
“It is productive, and profitable. Management gets paid a lot so that eats into your margins,” Whitworth says.
“It’s amazing how good they can go when you give them the space to do stuff.”
The art of getting people to pay for things
If all you have is user numbers, you’re a gamer and not a business person, Whitworth tells me. It’s all about getting people to pay what your work is worth.
The wrong approach is to delay price rises as long as you can, then suddenly raise them to where they should have been months ago.
“You need to do it much more often, in small amounts. In the B2B area, that doesn’t alarm the herd. Big rises freak out your clients, and they’ll go to tender or change their behaviour”, says Whitworth.
When reviewing prices regularly, Scene Change brings some prices up, others down.
Whitworth says there’s often a disconnect between what people working in an industry think a client would want, and what the client engaging with you needs. It’s not just about shiny ‘wow’ factors that excite staff, which customers won’t always pay for.
In general, the easiest things to charge more are those that lower risks for the client, particularly in the events space that Scene Change operates in.
“If you go ‘look, you really need that for onsite safety’ they’ll say fine,” Whitworth points out.
“Airlines charge people four times as much so they don’t have to sit near poor people. You can look to other industries for inspiration.”
Undisruptable also points out inconsistencies between business reality, and behaviour, especially around getting paid.
“Giving customers credit is like habitually using a hair dryer in the bath. You know how to hold a hair dryer. You’ve done it a thousand times. But you only have to drop it in the bath once. There is no business topic with such a galactic gap between what people know they should do versus their actual behaviour,” Whitworth writes in his book.
Lessons from a marketing past
Whitworth’s first business was an ad agency, which he called “tremendous fun”.
He also saw first hand how the field is a “young man’s game”, and decided he never wanted to grow old in that industry.
His worst nightmare would be to become a ‘Grey Ponytail’, which he described as older men leftover from a previous era, who were still adamant that their way was best.
“I used to look at them and go ‘just kill me’ if I ever become like that,” he says.
“You can’t be a creative director past the age of 40. You’re end up being a sad older guy trying to be down with the kids.
“My current business was an escape to become an adult business person.”
Having run a business in the advertising industry, I asked him what he sees as fair prices for standard marketing services, like a logo redesign for your business.
He points out that online talent factories have made prices so cheap for freelance design work that you can pick the more expensive options and still get great value.
“I would spend $500 – $1000, rather than look at the $59 logo deal,” he says.
If you see someone who can consistently get away with charging five times as much as everyone else on the site, that’s a good sign that they have quality work, he suggests.
In his book, Whitworth uses the analogy of a pair of shoes. If you had to choose a pair of shoes to wear to every client meeting for the next 10 years, would you spend $79 on them?
“You’re functionally equipped to go out in public, but no one is coming home with you,” says Whitworth.